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Flatter On Tuesday, Cash Closed Until London


TYZ2 operates a touch above Tuesday’s late levels, but shy of the NY session top, last +0-01 at 112-20+. A reminder that today’s Japanese holiday means that cash Tsys are closed until London hours.

  • Tsys firmed on Tuesday, with the major benchmarks running 2-7bp richer at the bell, as the curve bull flattened, allowing the 2-/10-Year yield spread to register another fresh extreme when it comes to the level of inversion witnessed.
  • An increase in COVID-related restrictions across some of the major Chinese cities would have aided the flattening momentum.
  • Elsewhere, receiver side flow in swaps seemed to aid the richening.
  • A wide tail (coupled with a cover ratio that fell further below the recent average as dealer takedown moved further above its own recent average) for the latest 7-Year Tsy auction limited the bid in the immediate aftermath of that particularly offering, before fresh demand became apparent into the close.
  • Looking ahead, the latest RBNZ monetary policy decision headlines the Asia-Pac docket on Wednesday.
  • Further out, the minutes from the latest FOMC decision headline the pre-Thanksgiving NY docket. We will also get flash PMI data, durable goods, new home sales, MBA mortgage applications, weekly jobless claims and the final UoM survey for Nov.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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